In response to this weeks brouhaha regarding attempts by members of Congress to avoid having to enroll themselves and their staff members in Obamacares health insurance exchanges, Michigan Republican Dave Camp, Chairman of the House Ways and Means Committee, has offered a new proposal: Why not put all federal employees on the exchanges? Its an attractive idea, but it has some downside: it would dismantle a popular model of market-based health reform.

"If the ObamaCare exchanges are good enough for the hardworking Americans and small businesses the law claims to help, then they should be good enough for the president, vice president, Congress, and federal employees," said Camps spokeswoman in a statement.

The political principle is straightforward, but it would come at a price. Putting all federal employees on the exchanges would obliterate the most market-oriented insurance program run by the government, the Federal Employee Health Benefits Program, or FEHBP. Indeed, the FEHBP has long been considered a model for market-based reform of the Medicare and Medicaid programs.

In the FEHBP, employees get to choose amongst a wide variety of plans offered by private insurers. The employer–the government–then subsidizes about three-fourths of the cost to the employee. The employee can choose a more generous or expensive plan if he wants, but he has to pay for a portion of the difference in price, and vice versa. As a result of this approach, FEHBP plans have organically evolved to contain the benefits and financial features that consumers want. By contrast, any minor change to Medicare requires an act of Congress.

Obamacares exchanges are closer in concept to FEHBP than traditional Medicare, but the exchanges heavily constrain the ability of plans to alter their design as consumers preferences evolve.

If you want to read all about it, buy Walton Francis book, Putting Medicare Consumers in Charge: Lessons from the FEHBP. Francis and others have shown that FEHBP provides superior customer satisfaction, a better benefit package, and greater cost control than Medicare does.

The real issue here is making sure that the people writing Obamacares laws and regulations are forced to "eat their own cooking." So lets keep Obamacares requirement that members of Congress and their staffs enroll on the exchanges, and also add the employees of the U.S. Department of Health and Human Services, because HHS has been busy writing thousands of pages of exchange regulations.

But, otherwise, lets keep the FEHBP program alive, as an alternative model of market-based reform. Indeed, if Obamacare had allowed Americans to participate in the same system that federal employees enjoy, it would have been a much better law.